Cross Ownership and Licensing Incentive

Ayu Sasni Munte

doi:10.55927/marcopolo.v1i4.4317

Authors

Ayu Sasni Munte Universitas Negeri Manado

DOI:

https://doi.org/10.55927/marcopolo.v1i4.4317

Keywords:

Cross Ownership, Cost-Reduction, Cross ownership, Cost-reduction technology.

Abstract

In a homogeneous good Cournot duopoly, a firm owns a cost-reducing technology and shares his ownership to its rival. We show that optimal output of firm 1 is lower under licensing than under no licensing but optimal output of firm 2 is higher under licencing than under no licensing. Superior firm will license its superior technology to firm 2 depends on how effective the technology is.

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